{"id":12082,"date":"2025-03-20T20:21:30","date_gmt":"2025-03-20T20:21:30","guid":{"rendered":"https:\/\/finderica.com\/?p=12082"},"modified":"2025-03-20T20:21:30","modified_gmt":"2025-03-20T20:21:30","slug":"7-things-to-know-before-you-get-started","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=12082","title":{"rendered":"7 Things to Know Before You Get Started"},"content":{"rendered":"\n<div>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"lazyload clicker_number\" style=\"position: absolute; height: 1px; width: 100%\" alt=\"ScoreCard Research\" data-count=\"104.245.38.58,104.245.38.58, 104.23.160.68\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\"><\/p>\n<p>Retirement planning can be equal parts stressful and exciting.<\/p>\n<p>You finally get to sleep in on Mondays, enjoy your hobbies, travel and spend more time with family.<\/p>\n<p>But creating a retirement plan is tricky. There are many moving parts to consider, from Social Security and Medicare to taxes and investments.<\/p>\n<p>It can seem daunting, but the sooner you make a retirement plan, the better.<\/p>\n<p>How long will your retirement be? A study released in 2023 showed people underestimate how long they will live, which is called longevity literacy. People who make it to retirement age can estimate living at least a couple of decades more. Social Security has a life expectancy calendar that can give you average estimates of longevity.<\/p>\n<p>If retirement is on your radar in the next year or so, here\u2019s a checklist of things to know and do before leaving the workforce.<\/p>\n<p><strong>More From The SS: <\/strong>Ditch Overpriced Car Insurance Now \u2014 Save $500 Today<\/p>\n<div class=\"adBorder\" id=\"thepe-366192896\">\n<h3>Is Your Bank Holding You Back?<\/h3>\n<p>Got $1,000 in checking? These\u00a0<a href=\"https:\/\/partners.thepennyhoarder.com\/1000-checking-account-make-4-moves-prt\/?aff_id=384&amp;aff_sub3=1000-checking-account-make-4-moves-prt\/&amp;aff_sub4=191809\" target=\"_blank\" rel=\"noopener\">smart moves<\/a> could help you reach your next big savings goal. <\/p>\n<\/div>\n<h2 class=\"wp-block-heading\">7 Essential Things to Put on Your Retirement Checklist<\/h2>\n<p>Retirement is calling your name \u2014 but can your budget handle it? Check out these tips to avoid financial stress and worry during your golden years.<\/p>\n<ul>\n<li>Figure out how much you need and how much you have<\/li>\n<li>Take inventory of your assets<\/li>\n<li>Know your full Social Security retirement age<\/li>\n<li>Learn how to maximize your Social Security benefit<\/li>\n<li>Plan on working in retirement? Know the Social Security earning limits<\/li>\n<li>Get familiar with your health care options<\/li>\n<li>Understand how your Social Security benefits are taxed<\/li>\n<\/ul>\n<h3 class=\"wp-block-heading\">1. Figure Out How Much You Need<\/h3>\n<p>The first step of creating your retirement readiness checklist is getting a ballpark figure of how much retirement income you\u2019ll need before you exit stage left.<\/p>\n<p>Several well-known formulas and guidelines attempt to help you figure out how much you need to retire.<\/p>\n<p>Two of the most popular are:<\/p>\n<ul>\n<li><b>25x Rule: <\/b>Take your annual expenses and multiply them by 25.<\/li>\n<li><b>70%-80% Rule:<\/b> Many experts say you will need about 70% to 80% of your average income during your working years annually to fund your retirement.<\/li>\n<\/ul>\n<p>While it\u2019s nice to keep these numbers in mind, creating your own retirement budget will yield the most personalized estimate of your retirement income and expenses.<\/p>\n<h3 class=\"wp-block-heading\">2. Take Inventory of Your Assets<\/h3>\n<p>You\u2019ll need to get a firm handle on your future cash flow in retirement.<\/p>\n<p>Identify all your sources of retirement income, including money from retirement accounts (such as 401(k)s and IRAs), pensions, Social Security and other income.<\/p>\n<p>You\u2019ll need to start taking required minimum distributions from your retirement accounts by age 73, so don\u2019t forget to include that in your plan.<\/p>\n<p>If you don\u2019t already have a budget or track your spending, pull out a few months of bank and credit card statements to get a handle on where the money is going.<\/p>\n<p>You\u2019ll want to review information from all your retirement savings, too.<\/p>\n<p>It\u2019s important to consider how your financial situation and living expenses will change in retirement. You won\u2019t spend as much money commuting to work, for example, but your health care costs will increase as you age.<\/p>\n<p>Don\u2019t forget about other financial obligations, too, like caring for parents or supporting children.<\/p>\n<p>Finally, try to eliminate as much debt as possible so it doesn\u2019t eat up your retirement savings later and derail your financial plan.<\/p>\n<h3 class=\"wp-block-heading\">3. Know Your Social Security Full Retirement Age<\/h3>\n<p>You can start collecting Social Security retirement benefits as early as age 62. But if you opt in early, your monthly benefits will be reduced significantly.<\/p>\n<p>You aren\u2019t eligible for full Social Security benefits until you reach what\u2019s known as your full retirement age.<\/p>\n<p>Full retirement age used to be 65, but that hasn\u2019t been the case for a while.<\/p>\n<p>The Social Security Administration now bases your full retirement age on the year you were born:<\/p>\n<ul>\n<li>If you were born between 1943 and 1954, your full retirement age is 66.<\/li>\n<li>If you were born between 1955 and 1959, your full retirement age increases gradually up to age 67.<\/li>\n<li>Anyone born since 1960 has a full retirement age of 67.<\/li>\n<\/ul>\n<p>You get a larger monthly benefit by working past your full retirement age.<\/p>\n<p>Your benefit amount increases for every month you do not accept Social Security benefits, although this added benefit maxes out at age 70.<\/p>\n<p>Keeping these figures in mind can help you pick the right retirement date to fit your budget.<\/p>\n<p><strong>More From The SS:<\/strong> The 11 Best Travel Credit Cards of 2025<\/p>\n<h3 class=\"wp-block-heading\">4. Learn How to Maximize Your Social Security Benefit<\/h3>\n<p>Like we mentioned above, you can increase your Social Security benefit by working past your full retirement age.<\/p>\n<p>There are other ways to boost your monthly benefit, but unfortunately, there aren\u2019t any quick fixes.<\/p>\n<p>Nearly every strategy that might increase your Social Security check boils down to this: Work longer, earn more money and postpone your retirement date as long as possible.<\/p>\n<h4 class=\"wp-block-heading\">Work at Least 35 Years<\/h4>\n<p>Social Security uses your 35 highest-earning years to calculate your benefit, so it\u2019s wise to stay in the workforce at least that long.<\/p>\n<p>Working more than 35 years can really pay off, especially if you\u2019re making significantly more money than you were in your early career because you get to replace some of those low-earning years with higher wages.<\/p>\n<h4 class=\"wp-block-heading\">Report All Your Earnings<\/h4>\n<p>Make sure to report earnings you make from tips, freelancing and self-employment throughout your career. Failing to report these earnings could reduce the amount of Social Security you get later on.<\/p>\n<h4 class=\"wp-block-heading\">Marriage and Divorce Make a Difference<\/h4>\n<p>How much you receive from Social Security also depends on your marital status.<\/p>\n<p>For example, if you\u2019re divorced and not remarried, you might be eligible to claim benefits based on your ex\u2019s work record (provided that your marriage lasted at least 10 years). Doing so won\u2019t impact their benefits.<\/p>\n<p>Or if your current or ex-spouse dies, you could qualify for 100% of their benefit if you meet certain requirements.<\/p>\n<div class=\"adBorder\" id=\"thepe-1369893060\">\n<h3>Can You Survive 10 Days of Budgeting?<\/h3>\n<p>If you need to wrangle your budget, it may be time to consider a savings challenge. Our\u00a0<a href=\"https:\/\/partners.thepennyhoarder.com\/organize-your-finances-prt\/?aff_id=384&amp;aff_sub3=organize-your-finances-prt\/&amp;aff_sub4=191763\" rel=\"false noopener\" target=\"_blank\">10-Day Savings Challenge<\/a>\u00a0will teach you how to make your money work for you with a high-yield savings account, stop overpaying on Amazon, earn money for trying out apps or watching movie previews and more.<\/p>\n<p><a href=\"https:\/\/partners.thepennyhoarder.com\/organize-your-finances-prt\/?aff_id=384&amp;aff_sub3=organize-your-finances-prt\/&amp;aff_sub4=191763\" target=\"_blank\" rel=\"noopener\">Start saving now<\/a>!<\/p>\n<\/div>\n<h3 class=\"wp-block-heading\">5. Plan on Working in Retirement? Know the Social Security Earning Limits<\/h3>\n<p>Yes, you can work and collect Social Security at the same time.<\/p>\n<p>But if you make more than $22,400 in the year 2025, your Social Security benefits will go down.<\/p>\n<h4 class=\"wp-block-heading\">Here\u2019s How it Works<\/h4>\n<ul>\n<li>Once you hit full retirement age, working doesn\u2019t impact your Social Security benefits \u2014 no matter how much you earn.<\/li>\n<li>If you\u2019re not yet at full retirement age but receive Social Security benefits, you can make up to $22,400 a year without penalty. (For context, that\u2019s $1,866 a month, or $431 a week).<\/li>\n<li>After that, your benefits are reduced by $1 for every $2 you make over $22,400.<\/li>\n<\/ul>\n<h4 class=\"wp-block-heading\">Here\u2019s an Example<\/h4>\n<p>Let\u2019s say you started collecting Social Security at 62 and receive $1,200 a month.<\/p>\n<p>A couple years later, you go back to work and earn $30,000 in a calendar year.<\/p>\n<p>That\u2019s $7,600 over the limit, so your yearly Social Security benefits would be reduced by $3,800, or $316 a month.<\/p>\n<p>In other words, making $30,000 during a year that falls between 62 and your full retirement age reduces your $1,200 monthly check to $884.<\/p>\n<p>But \u2014 and this is really important \u2014 that money isn\u2019t gone forever.<\/p>\n<p>Once you reach full retirement age, Social Security will recalculate your monthly benefit amount and give you credit for the months they reduced your payment.<\/p>\n<p><strong>More From The SS:<\/strong> Best Budgeting Apps to Get Your Finances Together in 2025<\/p>\n<h3 class=\"wp-block-heading\">6. Get Familiar with Your Health Care Options<\/h3>\n<p>Health care will likely be one of your biggest costs in retirement.<\/p>\n<p>Even if you\u2019re in good health now, it\u2019s important to plan ahead and understand your health care options.<\/p>\n<ol>\n<li>If you retire before age 65, you\u2019ll likely lose health coverage at work and need to find your own health care.<\/li>\n<li>At 65, you\u2019re eligible for Medicare.<\/li>\n<\/ol>\n<p>Early retirees can find themselves in a tough health care situation.<\/p>\n<p>You might be able to get coverage through a spouse\u2019s plan, assuming you\u2019re married to someone with workplace health coverage. (If they\u2019re on Medicare, they can\u2019t add you to their plan).<\/p>\n<p>Another option is to extend your employer\u2019s insurance benefits through COBRA for 18 months. But at an average cost of $421 to $751 per person per month, it\u2019s a pricey option.<\/p>\n<h4 class=\"wp-block-heading\">Health Insurance Options for Early Retirees<\/h4>\n<ul>\n<li><b>Try to find a part-time job that offers <\/b><b>health care coverage<\/b><b>.<\/b> Just be mindful of those Social Security earning limits.<\/li>\n<li><b>Find an insurance plan on the Health Insurance Marketplace. <\/b>Losing health coverage at work qualifies you for a 60-day special enrollment period on HealthCare.gov \u2014 the federal government\u2019s health insurance shopping and enrollment service for uninsured Americans.<\/li>\n<li><b>See if you qualify for Medicaid in your state. <\/b>Especially if you know your income in retirement will be small.<\/li>\n<li><b>Get a private health insurance plan on your own. <\/b>This can be complex and costly, especially if you\u2019re in poor health or on a limited income.<\/li>\n<\/ul>\n<h4 class=\"wp-block-heading\">What You Need to Know about Medicare<\/h4>\n<p>We\u2019d love to say things get easier when you turn 65 and enroll in Medicare, but that\u2019s not always the case.<\/p>\n<p>Contrary to popular belief, this federal health insurance program isn\u2019t free and it comes with several out-of-pocket costs.<\/p>\n<p>There\u2019s a lot to know about Medicare \u2014 much more than we can cover here.<\/p>\n<p>But here are a few important guidelines about Medicare:<\/p>\n<ul>\n<li><b>You may be automatically enrolled. <\/b>If you\u2019re already receiving Social Security benefits when you turn 65, you\u2019ll be automatically enrolled. You don\u2019t need to do anything else.<\/li>\n<li><b>You\u2019re required to enroll. <\/b>If you have coverage through a marketplace plan, COBRA through a past employer or TRICARE for retired military members, you\u2019re required to enroll in Medicare when you turn 65.<\/li>\n<li><b>You may still be covered. <\/b>You may not need to sign up for Medicare right away if you\u2019re still working and enrolled in your employer\u2019s group health plan or if your spouse is still working and you\u2019re covered under their plan. But be sure to check with your employer.<\/li>\n<li><b>You\u2019re eligible at 65. <\/b>Otherwise, your Medicare eligibility begins around your 65th birthday, and you have a seven-month window to sign up. Otherwise, you\u2019ll pay some stiff penalties for late enrollment.<\/li>\n<\/ul>\n<p>You can only qualify for Medicare before age 65 if you\u2019ve been on Social Security disability for at least 24 months. People diagnosed with end-stage renal disease or ALS also qualify.<\/p>\n<h3 class=\"wp-block-heading\">7. Understand How Your Social Security Benefits Are Taxed<\/h3>\n<p>Your Social Security benefits are technically income. So do you owe taxes on Social Security?<\/p>\n<p>In some cases, yes.<\/p>\n<p>If you have additional income, whether it\u2019s from a job or investments, there\u2019s a good chance at least part of your Social Security will be taxed.<\/p>\n<h4 class=\"wp-block-heading\">Retirees must pay federal income taxes on their Social Security benefits if:<\/h4>\n<ul>\n<li>Half of their yearly Social Security benefits + other income = more than $25,000 for single filers <b>or<\/b> $32,000 for married couples filing jointly.<\/li>\n<\/ul>\n<p>The IRS won\u2019t tax your entire Social Security income, even if you exceed those thresholds. Instead:<\/p>\n<h4 class=\"wp-block-heading\">50% of your Social Security benefits are taxable if:<\/h4>\n<ul>\n<li>Half of your benefits + other income = $25,000 to $34,000 for individuals <b>or <\/b>$32,000 to $44,000 for married couples filing jointly.<\/li>\n<\/ul>\n<h4 class=\"wp-block-heading\">85% of your Social Security benefits are taxable if:<\/h4>\n<ul>\n<li>Half of your benefits + other income = $34,000 and up for individuals <b>or<\/b> $44,000 and up for married couples filing jointly<\/li>\n<\/ul>\n<p>Keep in mind that while 50% or 85% of your Social Security benefits may be taxable, they will be taxed at your ordinary income rate.<\/p>\n<p>Here\u2019s a table of the tax brackets for reference.<\/p>\n<p><strong>More From The SS: <\/strong><\/p>\n<div class=\"adBorder\" id=\"thepe-644657041\">\n<h3>Need a Hand With Bills?<\/h3>\n<p>Listen, we know it\u2019s tough out there. But there\u2019s no shame in asking for help.<\/p>\n<p><a href=\"https:\/\/partners.thepennyhoarder.com\/ask-for-money-sdyn-prt\/?aff_id=384&amp;aff_sub3=ask-for-money-sdyn-prt\/&amp;aff_sub4=191831\" target=\"_blank\" rel=\"noopener\">These companies<\/a> make it easy to help yourself and your bank account.<\/p>\n<\/div>\n<p><i>Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The SS.<\/i><\/p>\n<p>        <!-- ACF Financial Disclaimer --><\/p>\n<p>        <!-- End ACF Financial Disclaimer --><\/p>\n<p>        <!-- Newsletter Signup Form --><\/p>\n<hr>\n<hr>\n<div class=\"mobile-ad-units\">\n<div class=\"unit\">\n                                    <a href=\"https:\/\/insurance.thepennyhoarder.com\/\" target=\"_blank\" rel=\"sponsored noopener\" class=\"aff_id_override\"><br \/>\n                        <img fetchpriority=\"high\" width=\"486\" height=\"437\" src=\"https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2025\/03\/18125329\/auto-insurance-light.jpg\" class=\"attachment-full size-full\" alt=\"\" decoding=\"async\" fetchpriority=\"high\" srcset=\"https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2025\/03\/18125329\/auto-insurance-light.jpg 486w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2025\/03\/18125329\/auto-insurance-light-360x324.jpg 360w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2025\/03\/18125329\/auto-insurance-light-300x270.jpg 300w\" sizes=\"(max-width: 486px) 100vw, 486px\">                    <\/a>\n                                <\/div>\n<div class=\"unit\">\n<p>                        <img width=\"486\" height=\"437\" src=\"https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2025\/03\/18125533\/cards-dark.jpg\" class=\"attachment-full size-full\" alt=\"\" decoding=\"async\" srcset=\"https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2025\/03\/18125533\/cards-dark.jpg 486w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2025\/03\/18125533\/cards-dark-360x324.jpg 360w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2025\/03\/18125533\/cards-dark-300x270.jpg 300w\" sizes=\"(max-width: 486px) 100vw, 486px\">\n                                <\/div>\n<\/p><\/div>\n<div class=\"newsletter-signup-wrapper-for-digioh\">\n<div class=\"col-xs-12 newsletter-wrap flex-row\">\n<div class=\"container flex-container\">\n<div class=\"col-xs-12 new-newsletter-form\">\n<p class=\"text-subheading\">Ready to stop worrying about money?<\/p>\n<p class=\"text-get-daily\">Get the SS Daily<\/p>\n<p class=\"email-privacy-policy-blurb-white\">\n<\/p><\/div>\n<\/div><\/div>\n<\/p><\/div>\n<p>        <!-- End Newsletter Signup Form --><\/p><\/div>\n<p><script type=\"text\/javascript\" id=\"wp-fcapi-js-before\">\n\/* <![CDATA[ *\/\n!function(f,b,e,v,n,t,s)\n{if(f.fbq)return;n=f.fbq=function(){n.callMethod?\nn.callMethod.apply(n,arguments):n.queue.push(arguments)};\nif(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0';\nn.queue=[];t=b.createElement(e);t.async=!0;\nt.src=v;s=b.getElementsByTagName(e)[0];\ns.parentNode.insertBefore(t,s)}(window, document,'script',\n'https:\/\/connect.facebook.net\/en_US\/fbevents.js');\nfbq('init', '263664193816679');\n\/* ]]> *\/\n<\/script><br \/>\n<br \/><a href=\"https:\/\/www.thepennyhoarder.com\/retirement\/retirement-checklist\/\" target=\"_blank\" rel=\"noopener\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Retirement planning can be equal parts stressful and exciting. You finally get to sleep in on Mondays, enjoy your hobbies, travel and spend more time with family. But creating a retirement plan is tricky. There are many moving parts to consider, from Social Security and Medicare to taxes and investments. It can seem daunting, but<\/p>\n","protected":false},"author":1,"featured_media":12083,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[348],"tags":[2285],"class_list":{"0":"post-12082","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-retirement","8":"tag-started"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/12082","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12082"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/12082\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/12083"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12082"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12082"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12082"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}